Why physicians chose the treatment patterns that they do and how to modify those patterns is a critical component to effectively managing health spending. A blog on Health Affairs talks about the current state of knowledge. (HA Blog) The predominant theory to this point has been that fee-for-service payment mechanisms are responsible for excessive utilization and spending because they create a financial incentive for over-delivery. The remedy has been to develop and use other payment schemes, like capitation or value-based reimbursement. This has probably been a simplistic approach, reflected in the fact that these new payment methods haven’t do much to slow health spending growth. Even when all doctors are paid fee-for-service, there have been large variations in practice patterns, so a simplistic theory that payment method determines treatment behavior simply wasn’t and isn’t accurate.
The blog post points out that other factors, such as physician risk tolerance, may play a substantial role. Like most of us, doctors would prefer to avoid bad outcomes and will often take whatever steps are necessary to avoid those. This may be exacerbated by very real concerns about malpractice suits, which not only can be costly, but affect a doctor’s reputation and eat up time. Another relevant factor is obviously what a physician learns during his or her training–what practice patterns are picked up during residency in particular. Several interesting pieces of research have suggested this can be a very important determinant. Another factor suggested by the blog post is physician unawareness of the cost of a service, in general or to the patient, or of the relative cost of the same service at different providers. Improving this awareness could help with cost-effective treatment choices.
Drug and device companies are very good at getting doctors to use their products, so they have a leg up on other participants in the health system who are trying to encourage more restrained and rational behavior. Similarly, health systems that now employ many physicians are working on how to have them maximize utilization of the health system’s assets, which also may not be good for health spending. Trying to reach the ideal of having physicians deliver or direct only that care which has a good likelihood of improving the patient’s health, while respecting patient care preferences, is very hard when so many different actors have other objectives for physician behavior. There needs to be a multi-payer effort to address practice patterns; an effort that provides specific rewards for efficiency, but also recognizes individual patient characteristics and allows flexibility to meet those.